Profitable. Payroll. Bureau.
Until very recently the juxtaposition of these three words in such close proximity was almost unheard of in most accounting firms. Payroll represented a tiny proportion of their overall revenue and, as such, was hardly worthy of close attention. Far more important to manage the BIG NUMBERS coming from the audit, tax and corporate finance teams.
But things are changing in the ‘New Reality’ of payroll service provision. Figures for 2016 from Accountancy Age reveal that, of the Top 100 firms who reported on turnover and growth by service line, the fastest growing service was payroll by a significant margin:
- The average growth in payroll income over the year was 20% for these firms
- And, for the same set of firms, the average overall increase in turnover was 7% – much more than the other firms
So it is perfectly clear – payroll revenue is a major factor driving revenue growth in accounting practices today. It will be interesting to see the figures for 2017 but there is every likelihood that they will be very similar – my clients are still reporting 10, 20 and 30% growth in payroll revenues.
The average growth of 20% hides some significant variations – so what are the factors which directly influence the success of a bureau? I manage a portfolio of nearly 100 bureau clients and, observing how they work, I have identified seven keys to success in the New Reality payroll bureau marketplace: the first and most important is buy-in from the Partners/Directors in the firm. Without this, you’re on a loser!
In my next post I’ll give you the other 6 factors along with examples and evidence for each. In the meantime, happy processing.